Risk Management and Response Planning for Successful Project Execution

Developed by David Rühmkorf

In a time of growing global competition, the outcome of projects is crucial to an organization's business result. Despite this, many projects still suffer from postponements, scope changes, failures, and cancellations. These issues can stem from inadequate risk management practices in projects such as risk identification and decision-making. The objective of project risk management is to enhance the likelihood of favorable outcomes and reduce the probability of potential risks to rise the chances of project success. The PMBOK® Guide describes that unhandled risk can result in deviations from the project strategy and hinder the accomplishment of the project goals. As a result, the outcome of a project is closely linked to the effectiveness of project risk management.

One method that served already as an adequate tool in various areas for identifying risks is the FMEA (Failure Modes and Effects Analysis). By applying an FMEA the project team is able to detect potential risks before they occur, assess their impact on the project outcome and implement appropriate measures to reduce or prevent them. For an enhancing evaluation and assessment of the measures, a cost-benefit analysis can be carried out anlong with the FMEA. By conducting this additional method it can be checked to what extent the execution of the measure makes sense from an economic point of view with regard to the respective project. Overall, it can be crucial for organizations to integrate these methods into their project risk management processes to ensure the achievement of project goals and business results.